Report of the High-Level Ministerial Dialogue

High-level Ministerial Dialogue onLIMITED

Social Security and Sustainable Social DevelopmentLC/CAR/L.92

in the Caribbean25 July 2006

St. John’s, Antigua and BarbudaORIGINAL: ENGLISH

14-15 June 2006

Report of the High-Level Ministerial Dialogue -

Social Security and Sustainable Social Development

in the Caribbean

St. John’s, Antigua and Barbuda, 14-15 June 2006

______

This report has been reproduced without formal editing.

Table of contents

Introduction...... 1

Item 1:Opening session...... 2

Item 2:Adoption of the agenda and organization of work...... 3

Item 3:An overview of a framework for a regional approach to social development..4

Item 4:Social security – Social protection and social provisioning...... 4

Item 5:Country statements...... 8

Item 6:Presentations from development partners...... 12

Item 7:Social dimensions of regional integration and social protection measures in theCaribbean SIDS 16

Item 8: Regional social development framework...... 18

Item 9:Plenary discussions...... 19

Item 10: Closing remarks...... 19

Annex ISocial development framework for advancing the social and sustainable

Development of Caribbean SIDS...... 20

Annex II:List of participants ...... 23

Report of the High-Level Ministerial Dialogue -

Social Security and Sustainable Social Development

in the Caribbean

Introduction

The Economic Commission for Latin America and the Caribbean (ECLAC), Subregional Headquarters for the Caribbean, convened a High-Level Ministerial Dialogue on Social Security and Sustainable Social Development in the Caribbean in St. John’s, Antigua and Barbuda, on 14 and 15 June 2006.

The meeting sought to provide an opportunity for experts in the field of social security to review social policies and programmes and their effectiveness in meeting the needs of the most vulnerable population groups in the Caribbean. This is in keeping with the mandate to follow up on the implementation of major United Nations global summits on social development and to support governments in the Caribbean in their efforts to achieve the Millennium Development Goals, and in keeping with the outcomes of the thirty-first Session ofECLAC. It is also consistent with the mandate of the Council for Human and Social Development (COHSOD), which established a subcommittee in 2005, under the chairmanship of Barbados, and including Antigua and Barbuda and Trinidad and Tobago, with a view to carrying forward the proposals for the development of a Caribbean Social Protection Strategy.

Representatives of the following Caribbean Development and Cooperation Committee (CDCC) member countries attended:Antigua and Barbuda, Barbados,Dominica, Jamaica, St. Kitts and Nevis, Suriname and Trinidad and Tobago. In attendance at the meeting were a number of ministers with responsibility for social development and representatives of the Caribbean Development Bank (CDB); the Caribbean Community (CARICOM) Secretariat; the Canadian International Development Agency (CIDA);the Department of International Development (DFID); the European Union (EU);the International Labour Organisation (ILO); the Organization of Eastern Caribbean States (OECS);the United Nations Development Programme (UNDP) and the United Nations Development Fund for Women (UNIFEM). The list of participants of the meeting is attached as Annex II.

The meeting followed the agenda as detailed below:

1. Opening session
2. Adoption of the agenda and organization of work
3. An overview of a framework for a regional approach to social development
4. Social security – Social protection and social provisioning
5. Country statements
6. Presentations from development partners

1

1. Social dimensions of regional integration and social protection measures in the Caribbean SIDS
2. Regional social development framework
3. Plenary discussions
4. Closing remarks.

Agenda item 1:

Opening session

Mr. Rudolf Buitelaar, Deputy Director of the ECLAC Subregional Headquarters for the Caribbean, welcomed the participants to the meeting. He reminded participants of the thirty-first Session of ECLAC convened in Montevideo, Uruguay, 20-24 March 2006, and in particular recalled the resolution adopted at that session which emphasized that social protection, in terms of healthcare and social security,was deemed essential in order to strengthen the social cohesion of regional countries. He also pointed to the common issues of low coverage, lack of financing and management problems that needed to be addressed.

He indicated that the aim of the meeting was to adopt a regional action plan with respect to social protection and that such an action plan would be aimed at advancing the achievement of the Millennium Development Goals in the subregion, through more effective dialogue, partnership and collaboration. This was especially needed, bearing in mind that governments had expressed concern regarding the proportion of populations living below the poverty line in countries of the subregion. He pointed out that governments were challenged to strengthen the social covenant based on economic, social and cultural rights and that ECLAC had suggested that such a covenant should include three key elements which converted social policy into a tool for promoting equity: universality, solidarity and efficiency.Finally, he thanked the Government of Antigua and Barbuda for hosting the meeting, mentioning in particular its support in the coordination of the organizational arrangements.

Ms. Leisa Perch, Programme Manager, UNDP Subregional Office for Barbadosand the OECS, welcomed participants on behalf of her organization. She emphasized that the meeting was a clear example of the continued commitment of the United Nations system to joint programming and strong partnership which would continue to be strengthened. She stated that economic development without social considerations had not proven sustainable nor had social development efforts de-linked from economic and fiscal realities. She reminded the meeting of the United Nations World Summit on Social Development (WSSD) convened in Copenhagen in 1995 during which heads of State and governments agreed to “integrate economic, cultural and social policies so that they become mutually supportive, and acknowledge the interdependence of public and private spheres of activity”.

Pointing out that the subregion performed well at a number of levels and ranked highly in terms of human development, she emphasized that poverty and inequality remained serious development challenges for the subregion. She concluded by outlining four important areas which posed significant challenges to the subregion: education, social vulnerability, youth in transition and HIV/AIDS.

Mr. Hamilton Lashley - Adviser to the Prime Minister on Poverty Eradication and the Millennium Development Goals, Government of Barbados, recalled the subregion’s vulnerability to external shocks and their impact on social and economic development. He outlined the Government of Barbados’ creation of the office of the Advisor on Poverty Eradication and the attainment of the Millennium Development Goals which would address social issues and embark on a strategy to achieve the Goals. He emphasized that due to changes in the economic, political and social environment in the subregion, a regional coordinated approach was required to deal with the issues of growing social disintegration and dislocation. To do so would, however, require strategic partnerships with the private sector.Thus, he viewed the meeting as an important step towards addressing the challenges that had been identified and formulating a regional plan of action to deal with these issues.

In his opening remarks,the Honourable Hilson Baptiste, Minister of Housing, Culture and Social Transformationof Antigua and Barbuda,emphasized the need for action in the subregion in dealing with social issues. He pointed to the importance of having the necessary funds in social ministries and lamented that these ministries were often underfunded and not considered crucial ministries, a perspective which he challenged. He outlined the importance of social dimensions and noted that while social ministries had not contributed directly to government coffers, they were able to develop policies that resulted in significant expenditure savings.

The Honourable Baldwin Spencer, Prime Minister and Minister of Foreign Affairs of Antigua and Barbuda, welcomed participants and reminded them of the importance of placing social development at the top of the agenda in the subregion. He stated that although remarkable improvement had been made in several areas, such as improved access to education, health and the standard of living of the people in the subregion, efforts at strengthening and harmonizing social services delivery in terms of quality and, in particular, quality were required. He considered the high-level dialogue as a platform for countries to respond collectively and collaboratively to the challenge posed by development and to learn from mistakes made in the past. He pointed to the increased ageing of Caribbean populations and how life expectancy had increased dramatically in recent times. This factor must be recognized and integrated into social policies and national strategic development plans. Finally, he emphasized the importance of continuing to forge linkages in the subregion through the CARICOM Single Market and Economy (CSME) to tackle social ills that were affecting the subregion’s social and economic development.

Ms. Sheila Stuart, Social Affairs Officerat the ECLAC Subregional Headquarters for the Caribbean, expressed her vote of thanks to the organizers of the meeting.

Agenda item 2:

Adoption of the agenda and organization of work

The meeting adopted the agenda as presented.

Agenda item 3:

An overview of a framework for a regional approach to social development

ECLAC presented an overview of the document ‘Shaping the Future of Social Protection: Access, Financing and Solidarity’, which was presented at the thirty-first Session of ECLAC, and the Caribbean response to this work. In particular, it was noted that a new approach to social securitywas needed, one which encompassed more solidarity and was based on human rights. This approach could be shaped through new covenants.

A shift from the current system, which was principally based on employment, would be required as contributions and tax-based financing should complement each other, where contributory and non-contributory systems worked alongside eachother. This would result in obtaining an improved balance between incentives and solidarity. In fact, employment-based social protection systems had failed to provide increased coverage in many countries in Latin America.

Therefore, a new approach where social protection was formulated as a social right was required, particularly sincepoverty denied the rights of citizens to be full members of society. Such a system would require capacity, institutions and resources; enforcement would only be a gradual process. Therefore, a new social covenant was needed, which had ethical and procedural components, to define the framework of social institutions and to determine which mechanisms would govern it.

The ECLAC representativepresented several of the sectoral proposals of the document regarding health-care systems, pension systems and anti-poverty social programmes, noting however that many of the proposals in the report pertained to Latin America and were not necessarily replicable in the Caribbean.

It was argued that the key challenge in the Caribbeanwas the task of defining a social protection framework that would respond to high levels of social vulnerability and that would act as an integrated, effective and comprehensive system, both as a safety net and as a springboard. Other challenges concerned the shift from social assistance to social development; creatingsocial protection and health services for all in the long term; improvingthe operation of labour markets and creating a contributory and non-contributory pension scheme. Finally, it was underlined that one would need to integrate risk management and risk reduction strategies at the regional, national and individual levels and that the subregion could only proceed with greater coordination and harmonization across countries with the collaboration of regional bodies and international agencies.

Agenda item 4:

Social security – Social protection and social provisioning

The Director of the National Insurance Scheme in Barbadosdelivered a presentation on approaches to social security reform in the subregion and its policy implications, achievements and challenges. He stated that social security initially focused on the poor in the subregion, but coverage had expanded over the years. However, the main political focus in the subregion had been directed towards economic issues.

In essence, Caribbean countries had incorporated a standard package of benefits. These included old age contributory pensions, employment injury, sickness, invalidity, maternity and funeral benefits. The major problem in the subregion, however, was related to the proportion of workers covered, as the informal sector in the Caribbean and the self-employed contributed a large proportion of the total work force, but were not covered by standard social security arrangements. The trend to contract labour exacerbated this problem, as these persons were unable to contribute on a regular basis. Therefore, he argued, the solution lay in creating greater flexibility, which in turn required more political will.

He also noted that pension reform was a critical issue in the Caribbean, and that several countries had begun the process. This was necessary because of the unprecedented and dramatic fall off in fertility rates in every Caribbean country, which had led to an inversion of the population pyramid. The introduction of full indexation of pensions remained a crucial component of pension reform: currently, only two countries in the subregion indexed pensions in an adhoc manner. Linked to this was the fact that insurable earnings also needed to be indexed.

Regarding funding, he pointed out that a major hindrance to carrying out necessary pension reform was the wide spectrum of stakeholders involved, and therefore a possible solution lay in the adoption of a genuine tripartite approach. He also referred to a noticeable concentration of investments in government paper and warned that for vulnerable economies in the Caribbean this might not be a wise decision.

In terms of scope and operation of benefits, he argued that the introduction of unemployment benefits might be worth considering in other countries as stabilization of income was an important component of social protection; currently these were only visible in Barbados. An unemployment programme should be linked with a training institution to encourage the unemployed to be re-trained for alternative skills. A further possibility pertained to the introduction of severance payments.

An important aspect of social security was the welfare system as it constituted a critical part of social provision in most countries. In conclusion, he stated that social security was more deeply complex than might ordinarily be evident and suggested thatwhile some progress has been made and joint seminars and conferences were taking place, there was need for more dialogue on the technical and critical factors of the various systems in the Caribbean.

The representative from Jamaicastated that intermittent increases in pensions were implemented every two years in Jamaica and that these increases were linked to inflationary factors, combined with increases in minimum wage. In response, the Director of the Barbados National Insurance Scheme made the case that indexation was required in all member States to ensure that inflows and outflows of the social security system matched and that currently increases in pensions were implemented at ad hoc intervals. He further raised the question as to whether or not social security should be increased in scope to provide health care and unemployment insurance; this issue was, however, up to national consensus.

The Minister of Housing, Culture and Social Transformation of Antigua and Barbuda stated that it was necessary to embrace social policy, noting that in recent boom years in Antigua and Barbuda, social policy had been neglected and social problems had increased.

It was also noted that in the current scheme many citizens viewed contributions to social security as an actual tax, hence they were reluctant to contribute.However, to simplify collection of contributions as well as disbursement of payments, a best practicehad been implemented in Saint. Lucia where a ‘mobile social security office’ had been created, whereby a vehicle manned with staff from the social security office would regularly travel around the island and visit people to facilitate their payments. This was a best practice which all participants hoped could be emulated.

Arepresentative of Barbados noted that while social security was an essential tool in poverty alleviation and thus symbolized the first pillar in protection against poverty, one would have to be more precise on what a ‘new social covenant’ would encompass. In addition, while extension of social security was important in the fight against poverty, it was not yet clear how the informal sector would be covered, and extending coverage to this sector would be beneficial in efforts aimed at poverty elimination.

In response to the statement of the representative of the OECS that the impact of current social security schemes was inherited from the pre-independence era, the presenter responded that the impact of social security had been significant for the subregion and that programmeshad been put in place to reduce risks to communities.Most of programmes had been modeled along the lines of income replacement programmes to ensure, for example, that. sick people had funds to recover and could return to the labour market.